http://www.straitstimes.com/premium/...e-ecs-20130108

EDITORIAL

Keeping sight of purpose of ECs

Published on Jan 08, 2013


PUBLIC dissatisfaction is mounting over the direction the executive condominium (EC) option in state housing has taken. The purpose of meeting a specific middle-class need has, in some cases, morphed into commercial objectives that foment market distortions.

One school of thought contends that initiatives over the decades - privatised HUDC flats and ECs; and the Design, Build and Sell Scheme - have "adulterated" the intent of public housing and pushed up prices in both state and private sectors. Regardless whether this assertion can be supported or not, price inflation is a matter of general concern and needs to be closely monitored. While a growing store of value in property is good for citizens, it would be a concern to first-time home buyers if it starts to race away from relative ratios in income levels and mortgage years that typically cover entire working lives.

Public housing allows lower-income and middle-income workers to have access to affordable homes. State subsidies are justified on this basis. However, when prices at the top end hit $2 million, this purpose is subverted and resentment is bound to arise. This is fed by the perception that "millionaire" beneficiaries do not need a helping hand - buyers who are clearly able to afford private property and developers who use oversized units and expensive frills as a marketing strategy.

Suggestions that have come from concerned citizens include capping the unit size in ECs and requiring a minimum number of flats to be built in a project. However, as National Development Minister Khaw Boon Wan has pointed out, developers of super-sized units are remaining within current Urban Redevelopment Authority (URA) rules.

They do this by tapping the "free space" given to encourage the building of sky terraces for common use. But when for marketing reasons, this space is increasingly carved out for selected units "with larger private roof terraces and 'private enclosed space', communal space in the development that benefits all residents will correspondingly shrink", as Mr Khaw observed. His direction to URA to review this practice is a timely one.

EC penthouses and "skysuites" that put many suburban private developments in the shade might represent a small portion of the output, but they can create a host of problems if left untended.

The eligibility for EC units - including a monthly household income ceiling - has been tightly framed. But those who can comfortably afford $2 million will raise questions of financial parity among applicants that can prove troublesome to tackle. Far better for EC developers to stick to the fundamental purpose of building affordable and not sumptuous homes.